Malloy sees no new taxes this year

Norwich — Gov. Dannel P. Malloy said Wednesday that he plans to present a balanced budget to the legislature Feb. 5 with no tax increases, though he may extend some temporary levies that were set to expire.

Malloy, speaking to 260 people during a Chamber of Commerce breakfast at the Holiday Inn Norwich, said he also was doing his best to avoid shifting the tax burden to municipalities. He said he crossed out several suggested cuts during a four-hour budget meeting Tuesday that would have required towns and cities to increase property tax rates to balance their budgets.

"I was a mayor for 14 years — I get it," Malloy said.

His administration has raised the state tax rate once, increasing collections by about $1.5 billion, and he said he didn't want to do it again. Instead, he said, he has been working to streamline state government and gain concessions from unions to reduce long-term obligations on retirement payouts and other benefits.

He projected total savings related to state benefits to be $26.6 billion over a two-decade period. Malloy said there are 1,200 fewer state workers than when he took office two years ago.

"We've done a lot of work in state government to modernize it and make it smaller," he said.

At the same time, Malloy said, the state has been investing in technology to make government more efficient. As an example, he said, the state is paying $250 million to upgrade its more than 20-year-old Department of Social Services computer system that still required manual labor to analyze potential fraud.

"It has to be done, and it should have been done years ago," he said.

Malloy also has embarked on programs to jump-start the economy and create jobs. New initiatives include the Small Business Express and First Five programs that provide funding for both large and small businesses as well as the Innovations Ecosystem that attempts to link great ideas with the capital necessary to get them off the ground.

While previous administrations have neglected to fight for jobs in the state, he said, under his administration the state has provided help to more than 500 companies, including 42 in eastern Connecticut. The $11 million local investment has led to 400 jobs being secured, added or retained in the region, he said.

"We were actually sitting on the sidelines watching people take our companies ... out of state," Malloy said. "On economic development, we had no strategy in Connecticut."

Part of Malloy's strategy has been to improve the state's education system. Malloy said he is working with the University of Connecticut to increase the number of engineers that the system can educate, while at the same time helping local school systems turn around and taking a more proactive approach to early education.

Malloy said he also has been trying to make investments in tourism promotion, though his initial $15 million annual budget was cut significantly in the second year of his administration. Tourism, he acknowledged, is important to eastern Connecticut, but some legislators in other sections of the state still don't get that a tourism marketing campaign eventually pays for itself.

Malloy said he will no longer tolerate slippage in Connecticut's ability to compete with other states for educated employees and new businesses.

"Samuel Clemens was right," he said. "We are the Land of Steady Habits, but when he was writing most of our habits were good. ... This is an administration built to move — and move quickly."